Report: 2007 budget proposal could lead to state payment cuts

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The president's fiscal year 2007 budget proposal to reduce Medicaid spending by $35.5 billion over 10 years could result in increased costs for states, according to a new report. That might lead to further payment cuts to nursing homes.

The administration's Medicaid proposals could force states to make cutbacks in their Medicaid programs, including reducing eligibility, benefits or provider payments to make up for the loss of federal funds, the Center on Budget and Policy Priorities said in its new report.

"Most of the administration's Medicaid proposals don't represent true 'savings' in that they don't reduce healthcare costs; they simply shift costs from the federal government to the states," said Andy Schneider, the lead author of the report.

The administration's budget, which was released Feb. 6, proposes legislative and regulatory steps to produce the desired Medicaid savings. The proposal would not generate savings in FY 2007, but would save $2.1 billion over 10 years.

The Priorities report can be seen at www.cbpp.org/2-14-06health-pr.htm.
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